The courtroom cage in Moscow stood empty on Thursday as a judge found the late whistleblower Sergei Magnitsky and his London-based employer guilty of tax evasion in a move likened to Stalin-era justice.

The case against the two defendants – Magnitsky, allowed to die an excruciating death in prison in 2009, and William Browder, banned from entering Russia since 2005 – has come to symbolise the brutality of Russia's system and the penalties incurred by those who uncovering official wrongdoing.

Magnitsky, a lawyer hired by Browder's London-based Hermitage Capital Management fund, uncovered a $230m (£150m) tax fraud scheme run by a host of Russian interior ministry and tax officials using documents stolen in a raid on Hermitage Capital. Magnitsky and Browder were then charged with running the fraud themselves.

Magnitsky was thrown into one of Russia's harshest pre-trial detention centres, repeatedly denied medical care and allowed to die. A presidential human-rights commission later found evidence that he was tortured.

Many of the officials involved in the alleged fraud the lawyer uncovered received promotions and awards.

Thursday's verdict was the culmination of a year-long effort to discredit Magnitsky, and Browder, who has waged a global campaign to punish top Kremlin officials for the former's death.

Magnitsky was spared a posthumous jail sentence after a Moscow judge acknowledged that he was already dead. Browder was sentenced to nine years in absentia, and banned from doing business in Russia for three years.

"The Russian government is effectively a criminal regime now," Browder said by telephone from London He he has been living in the UK since being denied entry into Russia after landing at Moscow's Sheremetyevo airport in November 2005 on the grounds he was a threat to national security.

Once Russia's largest portfolio investor, and one of President Vladimir Putin's biggest foreign fans, Browder appeared to have run afoul of the Kremlin after picking up stakes in some of the country's largest state-run companies.

"Doing business in Russia means either you've effectively become part of a criminal regime or a victim of a criminal regime," Browder said.

"There's no way to do business in Russia without seriously compromising yourself or putting yourself in grave danger."

Browder said his and Magnitsky's relatives had refused to take part in the trial. "We didn't want to dignify a clearly illegitimate judicial process," he said.

Speaking of Magnitsky's relatives, Browder added: "As you can imagine, it's one thing to have their son and husband murdered. But it's just beyond sadistic to them to prosecute his corpse."

In an earlier statement, Browder said: "Today's verdict will go down in history as one of the most shameful moments for Russia since the days of Joseph Stalin."

The Magnitsky verdict comes days after a Russian court convicted a dead woman in the first posthumous trial in Russia in decades. Olga Alexandrina was found guilty of causing the car accident that killed her despite widespread evidence that the other driver, a vice-president at Russian oil major Lukoil, likely caused the crash.